The price elasticity of demand for cigarettes is 0.4. If government wants to reduce smoking by 10 percent, by how much should it raise the price of cigarettes by imposing a tax?

Refer to Figure 4.2. The dominant strategy for Ferris is to

A) go to the movie theater. B) go to the bowling alley. C) go to either the movie theater or to the bowling alley. D) Ferris does not have a dominant strategy.

Refer to Figure 4-1. If the market price is $2.50, what is Kendra's consumer surplus?

A) $9.00 B) $7.50 C) $1.50 D) $0